Delhi High Court by order dated 28.04.2021 granted stay on the proceedings/ summons by CGST officer, when proceeding already conducted by State Tax Officer.
1. Delhi High Court by order 28.04.2021 in WP (C) No 5040/2021 in the matter of M/s. Koenig Solutions Pvt. Ltd Vs. Union of India & Ors has stayed the proceedings initiated by the Central Tax Officers against the Petitioner company whose jurisdiction has been assigned to the State Tax officer, Delhi, who have also exercised the jurisdiction. Mr. J.K. Mittal represented the Petitioner in this case.
2. The High Court granted the stay and also recorded the submission of bar under section 6(2)(b) of the Central Tax Officer.
3. The High Court also took cognizance of the fact that summons have been issued by using the language that Petitioner representative should not leave the office without completion of the inquiry or without leave permissions of the officer or till the inquiry/ case is adjourned, which is contrary to the format for the summons prescribed by the Central Government.
4. The High Court, while granting the stay, has found that prima facie there is lack of jurisdiction by the Central Tax officer, and issued notice and granted time to file reply by the Respondents/ Department and fixed up next date July 20, 2021.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
CM APPL. 15430/2021
1. Allowed, subject to just exceptions.
W.P.(C) 5040/2021 and CM APPL. 15429/2021
2. J.K. Mittal, learned Counsel, who appears on behalf of the petitioner, assails the impugned summons dated 30.03.2021, on several grounds.
2.1 Amongst other grounds, Mr. Mittal says, the summons have been issued without jurisdiction, inasmuch as inquiry for the same period, i.e., financial year 2017-2018, was carried out by the State Tax authority; whereupon after receipt of a reply from the petitioner, the same was closed.
2.2 Mr. Mittal, in this behalf, has drawn our attention to two show cause notices, dated 12.11.2020 and 25.01.2021. The show-cause notice dated 12.11.2020 was issued by the Assistant Commissioner, Ward 55, Zone 3, Delhi, whereas show cause notice dated 25.01.2021 was issued by Sales Tax Officer, Class II/AVATO, Ward 55, Zone 3, Delhi.
2.3 Mr. Mittal says that the petitioner, qua the financial year 2017-2018 paid the tax on 30.01.2020, and likewise paid the interest in and about 30.11.2020; as quantified in the show cause notices referred to above.
2.4 Mr. Mittal also emphasizes the fact, as noticed above, that, pursuant to the reply submitted by the petitioner, the show-cause notice issued by the concerned authority, was closed.
2.5 In support of his plea, our attention has been drawn to the communication dated 19.02.2021.
2.6 It is for these reasons, Mr. Mittal says, that the impugned summons dated 30.03.2021 are without jurisdiction.
2.7 In support of his argument, Mr. Mittal has relied upon Section 6(2)(b) of the Central Goods and Services Tax Act, 2017 (in short, „CGST Act, 2017‟).
3. For the sake of convenience, the relevant parts of the said provision are set forth hereafter:
“(1) Without prejudice to the provisions of this Act, the officers appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are authorised to be the proper officers for the purposes of this Act, subject to such conditions as the Government shall, on the recommendations of the Council, by notification, specify.
(2) Subject to the conditions specified in the notification issued under sub-section (1),–
xxx xxx xxx
(b) where a proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter.”
[Emphasis is ours]
4. We may also point out, it is also Mr. Mittal’s contention, that the impugned summon has not been issued in the prescribed format.
5. Mittal, in this context, has drawn our attention to the format of the summons, which is appended on page 77 of the electronic paper book.
6. According to Mr. Mittal, the concerned officer appears to be acting in a high-handed fashion, inasmuch as, in the impugned summons, it is stated that the authorised representative of the petitioner is not to leave the office of the officer concerned without his permission.
6.1 For the sake of convenience, the exact words used in the impugned summons are set forth hereafter [Page 71 of the electronic paper book]:
“You would not leave the office without completion of the inquiry or without my permission or till the inquiry/ case is adjourned …”
7. It is further contended by Mr. Mittal that the impugned summon has been issued without application of mind as it adverts to the provisions of the statute, which have no relevance to the CGST Act, 2017.
8. Having heard Mr. Mittal, we are of the view that the petitioner has made out a prima facie case for wrongful assumption of jurisdiction.
9. Mittal says that since the impugned summons was received on 07.04.2020, albeit after the time indicated therein, the authorised representative of the petitioner could not attend the proceedings.
10. In these circumstances, we are inclined to issue notice in the petition and the captioned application.
10.1 Ms. Venus Mehrotra, who appears on behalf of the respondent nos. 2 and 3, accepts service of the notice on behalf of the said respondents. Likewise, Ms. Sukriti Ghai, accepts notice on behalf of respondent no. 4, while Ms. Shruti Shivkumar, accepts notice on behalf of respondent no. 1.
10.2 Counter-affidavits will be filed within 4 weeks. Rejoinder thereto, if any, will be filed before the next date of hearing.
11. List the matter on 20.07.2021.
12. In the meanwhile, there will be a stay on further proceedings, which respondent nos. 2 and 3 may intend to carry out, pursuant to the impugned summons dated 30.03.2021.